Farmers were loving the U.S. Department of Agriculture Wednesday for reporting an unexpected drop in acreage to be planted with corn and soybeans. The shockingly low planting estimates could result in a severe shortage of both crops if any weather problems develop, such as if it’s either too cold or wet during planting, or too hot and dry during mid-summer, or too cold or wet at harvest time. Corn exploded 25 cents per bushel, and beans shot up 70 cents immediately after the report and remained “limit up” by day’s end. Our planting weather looks fine for now, but some meteorologists predict the corn belt could experience dry conditions like the southeast.
The quick recovery in American road travel has created a demand for corn-based ethanol, serving as a bullish factor on the demand side. Wheat acreage was closer to expectation, so that crop was weaker in comparison. Markets fell Thursday and closed earlier than usual due to Good Friday, throwing a sad April Fool’s turn of fortune at both speculators and producers who had been so pleased with Wednesday’s prices. Corn for May delivery traded at $5.60 per bushel, while December corn traded at $4.83.
Brazil, Beans, Bolsonaro
On Tuesday, the chief of Brazil’s army, navy and air force suddenly resigned due to a sharp decline in public support that, this time, is due to President Bolsonaro’s inability to control COVID-19. Hundreds of Brazilians are dying every hour. Bolsonaro’s image suffered last year from his treatment of indigenous people and the massive deforestation associated with creating more land for agriculture. In an unlikely alliance, many U.S. farmers, environmentalists and corporations are unified in hoping he fails in both his deforestation and military aggression.
In 2018, Brazil knocked the U.S. out of first place as the world’s top soybean exporter. Brazil is now China’s number-one soybean supplier — meaningful because China imports more soybeans than anyone, using it to make high-protein feed for hogs and poultry. With Brazil now a major beans player, President Bolsonaro’s success or failure could affect American bean farmers’ lives.
May beans traded at $14.36, while beans for November delivery traded at $12.56, up 50 cents compared to last week.